* Martin was due to step down in May
* Bapineuzumab Phase III trials expected in H2 2012
* Elan will main dialogue with succession candidates
DUBLIN, March 1 (Reuters) - Irish drugmaker Elan has asked outgoing Chief Executive Kelly Martin to stay on until key data on an Alzheimer's drug that is "potentially transformational" for the company are released in the second half of the year.
Martin, a former executive at investment bank Merrill Lynch, said in 2010 he would stand down from the Dublin-based biotechnology company in May this year and said last October the search for his successor was well under way.
However he agreed to extend his tenure until the publication of Phase III data on Bapineuzumab, an experimental treatment being developed by Pfizer Inc and Johnson & Johnson in which Elan has a 25 percent economic interest.
"The full board and I believe that Elan and our shareholders will be best served by having Kelly continue his leadership through this critical period and strategic inflection point in the company's progression," Elan Chairman Robert Ingram said in a statement on Thursday.
"The implications of the upcoming completion of the pivotal trials is potentially of transformational significance for Elan."
Bapineuzumab, which is competing with Eli Lilly and Co's solanezumab, is being promoted as the first to slow progression of Alzheimer's, a disease that affects more than 35 million people worldwide.
Ahead of plans to release the Phase III data in the second half of this year, Pfizer Inc's research chief said last month the drug presents the industry's best chance to delay progression of of the memory-robbing illness.
Elan discovered the approach to the drug and oversaw early trials but sold its other 25 percent stake in the drug to Johnson & Johnson in 2009 as part of deal that saw the U.S. group also take an 18 percent stake in the group as a whole.
Elan said it would maintain dialogue with what it described as a number of exceptionally high caliber succession candidates who remain interested in the position and support the decision. (Reporting by Padraic Halpin; Editing by David Holmes)